Utilization Question

[Anonymous]

If I charge alot on my credit cards, but pay them down to a zero balance every month, will that negatively affect my score? 

Also, I am a little confused, is it better to to pay off my balances each month or to leave a small balance?

Thanks!

[Anonymous]

If you PIF after the CCC reports it to your credit, then your CR and FICO will not reflect the PIF.  They will show a balance and this will adversely affect you.  In order to overcome this, be sure to PIF prior to the statement cut off.

It is better to allow a small balance to report on a single account.  Some people say 1 or 2, for me...1 account always provides the best score results.

However, unless you are shopping credit, maintaining a "tweaked" FICO is not necessary and may not even be the best thing to do and here is why.  Because lenders look for changes in patterns, if you constantly keep an artificially high FICO, when you go to actually use your credit, this will create a larger drop in score, thus possibly flagging you for review or even AA.

Keep the credit healthy, but don't obsess.  Spit shine and dress it up when shopping for new credit, but othewise just maintain a healthy credit regimen. 

[Anonymous]

Thank you so much!

I am 18 and try to establish credit and it is very hard.  After doing some research I thought it would be better to try to establish credit with with a big bank.   I currently have the following cards:

Citi Student Reward

Capital One  - Does not show up on my credit report yet

Victoria Secret - Does not show up on my credit report yet

Macy

Fico Scores:

EQ - 668

TU - 721

Do you know why the scores are so different?  The are both reporting the exact same two accounts!  (both repors from My Fico)

My mom has given me a lot of information on how important it is to keep my credit perfect, and I am trying my best   I would like to qualify for an American Express or Discover card as soon as possible, that's why I am trying to find out the best ways to get there!

I really don't need to use my credit card for purchases, I mainly use it for the rewards points.

Thanks!

[haulingthescoreup]

Print out your two reports, and go through them line by line with a yellow highlighter, especially comparing dates and balances (easy to miss first time through.)

Since these are FICO EQ and TU's, what are they telling you on screen 2 of your reports? This is the screen with the balance scale, with negatives in red and positives in green.

You will almost always have different scores from each bureau, as they commissioned their own score formulas, but that's a pretty big gap.

[Anonymous]

Thanks!

EQ - Good

No missed payments

Low Credit Usage

TU Bad -

Short Account History

Seeking Credit

Short Revolving History

TU - Good

No missed payments

Low Credit Usage

Recent Credit Card Use

TU - Bad

Short Account History

Seeking Credi

No Installment Loans

Everything matches exactly!  I cannot make heads or tails out of this...I have heard of 10-30 point differences, but 53 in HUGE    I really am trying to understand this!  HELP!

[haulingthescoreup]

Well, we know that TU rewards for the presence of loans, so that might be part of it.

How many inqs do you have on each report?

[Anonymous]

TU - 8 since July of 08

EQ - 11 Since July of 08

Do you think this could be the reason?  I thought the inquires really didn't impact your credit report that much...

[haulingthescoreup]

They don't have a huge impact, and you can get away with more when your credit is young, but they do count. They're what are underlying the "seeking credit" negative comments.

Still doesn't explain the discrepancy, though.

So any balances are also the same on each report? If TU hadn't updated several reports, that would raise your util, which can drop scores.

Also, how many accounts show balances, as compared to how many open accounts on each report? 5 accounts with balances out of 7; 2 accounts with balances out of 5.) This is for all credit types, including loans and mortgages, although I think that all you have are cards. TU gets more upset than the others about "too many accounts with balances," although they didn't list it on this report. (The negatives are listed in descending order of importance.)

[Anonymous]

Currently I only have 2 TL's reporting Citi and Macys.  my Citi card has a balance of $50 - Macy's is zero.both the Victoria Secret card and the Cap1 card have zero balanaces even though they are not reporting yet.  (just open in March).